At the dawn of the new year, Iran begins to clear the outstanding Basmati Rice bills to India. Accordingly, 52% of Indian companies have received their payments.
India’s Export to Iran Stalled in 2019-20
Despite Iran being the largest buyer of basmati rice from India, the uncleared bills had hit the trade between the countries. Primarily, Iran imports over 34% of rice varieties from India. However, the delay in payments led to a drop in import. Further, Iran’s due mounted to over Rs 1700 crore to Indian exporters. Thus, Basmati rice export saw a 25% drop in 2020.
Iran Clearing the Basmati Rice Bills
As of now, Iran has transferred approximately Rs 900 crore to Indian Companies. In other words, 52% of the due to Indian exporters has been cleared. Accordingly, the companies received their respective payments through UCO and IDBI banks. Also, Iran assures to clear the rest of the bills concerning the 1.32 million tonnes of Basmati rice purchase in 2019-20.
India’s Basmati Rice Exports to Iran is Yet to Resume
Despite Iran beginning to clear all its outstanding basmati Rice bills, exporters are still on edge to sell. Further, the GoI has advised the Indian Basmati Rice exporters to export rice only after receiving the payment in advance. Even though 52% of the amount is cleared, exporters fear that this is just a ruse for resuming the exports. Further, this season (January to March) is the peak season for export; over 40% of sales occur now. Thereby, the exporters are a bit cautioned.
In all, the demand for Indian Basmati Rice in Iran is high. However, due to the delay in payments, India has halted the export. Now, with the funds flowing in, Indian exporters might resume the exports. Nevertheless, a clear picture of the trade will emerge next month.